Treasurer Wants Colorado Pension Fund To Smoke Out
Terrorism

September 6, 2002 (PLANSPONSOR.com) - A state
official has called on the Colorado public pension fund to
determine whether companies in which it invests support
terrorism and, if they do, to see if they represent too high
of an investment risk.

Colorado State Treasurer Mike Coffman cited the
risk to the Public Employee Retirement Association (PERA)
of putting money into those companies that could face
substantial harm in the wake of international sanctions or
even military strikes. That harm could severely impact the
value of stocks and bonds in the pension fund’s portfolio,
he said.

“Pension funds across America should be looking at this
issue because whether investing in stocks, bonds or venture
capital, we must deal with this new type of investment
risk,” Coffman told Washington-based publisher BNA.

Coffman said companies with business ventures in countries
such as Iran, Iraq, and North Korea that are alleged to
support terrorist activities could also face significant
losses due to negative publicity or divestment
campaigns.

Outside Experts

In a recent letter to the PERA board, Coffman
recommended that the organization hire a private company to
figure out which of PERA’s holdings face terrorism-related
risks that could be hurt by an anti-terrorism backlash. A
Coffman spokesman said such a consultant would cost $10,000
to $15,000.

“I believe PERA must identify ways to conduct the due
diligence needed to take these risks into consideration
when it is making investment decisions,” Coffman said. “We
cannot afford to take a wait-and-see approach.”

Katie Kaufmanis, spokeswoman for PERA, told BNA that nearly
14% of the association’s $25 billion stock portfolio is in
foreign investments. She said she did not know what
percentage of the portfolio is invested in companies that
could have exposure to terrorist-related activities.